Buying property in Spain

Who can buy in Spain

There are no restrictions on who can purchase property in Spain, whether you’re an EU or non-EU citizen.

However, you’ll need to get a Spanish tax ID number, called a NIE (Número de Identificación de Extranjeros), and open a Spanish bank account to buy property.

The buying process in Spain

When you’ve found a property you’d like to buy, request to see the Nota Simple, which outlines the property’s details, confirms ownership, and lists any outstanding debts on the property. It’s also recommended to get a building survey to fully understand the property’s condition before making an offer.

If you’re happy to go forward, submit an offer to the estate agent. If accepted, both parties must sign a preliminary agreement called a ‘contrato de arras’, and you’ll pay a 10% deposit. The agreement details the terms of the sale, including the purchase price, property description, and conditions.

Next, the deed of sale, known as the ‘escritura de compraventa’, must be signed by both parties in front of a notary. This formally transfers the property, and the notary registers the new owner with the land registry.

Financing your property in Spain

If you need a mortgage to purchase a property in Spain, having an agreement in principle in place shows how much you can borrow from a lender. This positions you strongly as a buyer, improving your chances of having your offer accepted. 

Some sellers won’t accept a mortgage clause within the purchase contract, so speaking to a mortgage broker early is essential so they can include a mortgage clause in the agreement in principle.

In some cases, it’s possible to borrow 100% of the property’s purchase price by combining a mortgage with a Lombard loan.

Fees and taxes in Spain

• Property transfer tax differs by region, ranging from 6% to 11% of the purchase price.
• New build properties are subject to 10% VAT plus stamp duty, which varies from 0.5% to 1.5%.
• Notary fees typically range from 0.5% to 1% of the purchase price.
• Land registry fees range from 0.5% to 1% of the purchase price.
• Legal fees are approximately 1% to 2% of the purchase price plus VAT.
• There is an annual property tax called IBI (Impuesto sobre Bienes Inmuebles), which varies by municipality and typically ranges from 0.4% to 1.3% of the cadastral value.
• If your home is worth over €700,00, you’ll begin paying a progressive wealth tax that varies depending on the location. If you’re a resident and the property is your primary home, you’re entitled to an additional €300,000 exemption.